The U.S. Federal Reserve may hike interest rates to nearly 6%, BofA Global Research said, as strong U.S. consumer demand and a tight labor market would force the central bank to battle inflation for longer.
"Aggregate demand needs to weaken significantly for inflation to return to the Fed's target.
Further supply-chain normalization and a slowdown in the labor market will help, but only to a degree," said BofA in a noted dated Feb. 27.BofA's hawkish stance comes after it recently added expectation for another quarter basis-point hike inThe brokerage expects the U.S. economy to tip into recession by the third quarter of 2023.
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